At its fifth annual Open Compute Summit in San Jose, Calif., the world's second-largest PC and server processor-maker, Advanced Micro Devices Inc. (AMD), has announced the start of a crucial transition. It announced the sampling of the Opteron A1100 Series processor and an accompanying development kit.

I. Seattle Calling

These are no ordinary AMD chips. They are AMD's first chips to pack ARM Holdings Plc's (LON:ARM) processor architecture, an architecture that has dominated the mobile space.

This is a soft launch. AMD will be making actual Seattle samples (the codename for the A1100 server chips) available "in the next few weeks" in March. Actual commercial availability will arrive sometime in H2 2014, according to AMD.

For AMD this is a critical release in its bid to return to profitability. AMD has set some incredibly ambitious goals for itself, announcing its intent to become not just a leader, but "the leader in ARM CPUs" and "the leader in ARM servers". AMD evens sets a hard target for itself -- 25 percent of total server chips sales -- more than five times its current market share.

AMD presents its first ARM server chip in San Jose. [Image Source: AMD]

How did AMD get here? What is Seattle? And what can we expect from AMD's ARM push? Let's look into the answers.

But for all those attempts it still posted a loss in 2013, small as it might be. More troublingly, AMD's market share deficit has grown, not shrunk. In 2007 -- in AMD's strongest market (servers) -- it held roughly 15 percent of the market. By 2012 it had less than a third of that total, with 4.4 percent of the market according to market research firm Trefis.

A major problem is simply that it's very expensive to design processors, and AMD does not have the kind of research and development cash that its rival Intel has.

III. The Answer?

With the advent of the mass mobile market, AMD sees perhaps its best chance to finally escape Intel's shadow and try to return to steady profitability. Critically, the mobile industry operates on a fundamentally different processor design model, one that spreads the costs and development.

The model begins with ARM Holdings Plc (LON:ARM) which designs the basic core. Then comes the integrators like Qualcomm Inc. (QCOM) and NVIDIA Corp. (NVDA) who add on coprocessors (media, security, I/O, etc.). Lastly graphics firms, such as Imagination Technologies Group Plc (LON:IMG) (or NVIDIA) add on value via their special graphics processors.

Having watched NVIDIA's success in jumping into the role as ARM processor maker, but also NVIDIA's subsequent struggles to sell its ARM processors, AMD is planning a different route. Instead of becoming just another mobile processor maker, AMD is looking to position itself as an early server processor maker.

AMD has tremendous server expertise in-house and the SeaMicro acquisition further strengthened that prowess. AMD's server processor product line has arguably been stronger for some time than the consumer line that tries to compete almost solely on pricing. Despite Intel's process lead, AMD's Opteron server processors in recent models have been able to beat Intel's Xeon server processors in one critical metric -- heavily threaded loads.

Many believe that ARM cores are more conducive to massively multicore chips. Intel's Xeon Phi (formerly: Knights Corner) -- x86 chips that currently pack up to 61 cores -- would certainly call such claims into question.

But much like the GlobalFoundries spinoff, the move unquestionably will help offload an expensive and complex part of the CPU design and production food chain that AMD long did itself. NVIDIA's ARM journey shows that ARM Holdings has made it reasonably easy for even a semiconductor firm inexperienced in processor development to deploy an ARM-equipped system-on-a-chip (SoC).

The move could further cut costs by allowing AMD to leverage the ARM-specific process technologies found at third party fabs like Samsung Electronics Comp., Ltd. (KRX:005935) (KRX:005930) and Taiwan Semiconductor Manufacturing Comp., Ltd. (TPE:2330) (TSMC).

IV. The Specs

The A1100 Opterons include:

4 or 8 core ARM Cortex™-A57 processors

Up to 4 MB of shared L2 and 8 MB of shared L3 cache

Configurable dual DDR3 or DDR4 memory channels with ECC at up to 1866 MT/second

Up to 4 SODIMM, UDIMM or RDIMMs

8 lanes of PCI-Express® Gen 3 I/O

8 Serial ATA 3 ports

2 10 Gigabit Ethernet ports

ARM TrustZone® technology for enhanced security

Crypto and data compression co-processors

AMD's development platform supports up to 8 SATA drives, 128 GB of DDR3 DRAM, and an octacore ARM chip.

The development platform AMD is shipping to potential customers and ARM server developers includes:

An AMD Opteron A1100 Series processor

4 Registered DIMM slots for up to 128GB of DDR3 DRAM

PCI Express® connectors configurable as a single x8 or dual x4 ports

8 Serial-ATA connectors

Compatibility with standard power supplies

Ability to be used stand-alone or mounted in standard rack-mount chassis

Standard UEFI boot environment

Linux environment based on Fedora, which provides developers with a rich set of tools and applications

Java 7 and Java 8 versions to provide developers to work in a 64-bit ARM environment

AMD has a number of partners working on the ARM server project.

AMD is targeting large virtual machine clients, such as hosting firms, academic supercomputing institutions, and internet content providers like Facebook, Inc. (FB) (an AMD client who is specific mentioned as one of AMD's partners for the project).